Fidelity offers service to combat elder financial abuse

The firm's clearing and custody division is partnering with EverSafe to help advisers protect senior clients from fraud.

Fidelity Investments’ clearing and custody unit is offering a new service to advisers to help them curtail elder financial abuse, seizing on a dialogue that’s been ramping up among regulators and policymakers.

As part of the new service, Fidelity Clearing & Custody is partnering with EverSafe, which monitors seniors’ financial accounts and credit reports and provides alerts of any suspicious activity.

Fidelity’s program is meant to address a prevailing trend in the U.S., according to David Canter, executive vice president of practice management and consulting at Fidelity Clearing & Custody. Approximately 10,000 baby boomers will turn 65 every day through the year 2030.

“You can’t ignore the demographics. There’s literally a tidal wave of baby boomers entering the ranks of 65 and older on a daily basis,” Mr. Canter said. “It’s really the coming of age of the baby boomers, and that made us pay particular attention.”

When clients’ bank, credit card and investment accounts are linked in EverSafe’s program, the firm reviews the last 90 days of history for suspicious activity and scans accounts daily thereafter.

Fidelity is offering EverSafe access to advisers at a 20% discount on the monthly subscription fee, which ranges from $7.99 to $22.99 based on different service levels. Some advisers are considering bundling the service into their advisory offering, absorbing the cost as part of a more holistic package, Mr. Canter said.

Advisers also would have access to Fidelity’s educational materials such as white papers on elder financial abuse.

The issue of elder financial abuse has gained prominence among legislators and regulators as well.

Two senators, Susan Collins, R-Maine, and Claire McCaskill, D-Mo., introduced bipartisan legislation last month to cut down on elder financial abuse. The Senior$afe Act of 2015 would encourage advisers and financial institutions to report financial fraud directed at seniors.

According to the National Adult Protective Services Association, only one in 44 cases of elder financial abuse is ever reported. Yet one out of every five advisers has seen elder abuse among their older clientele, according to a new Fidelity survey.

Elder financial abuse is responsible for $2.9 billion in annual losses, according to the MetLife Mature Market Institute.

In September, the Financial Industry Regulatory Authority Inc.’s board of governors authorized the regulator to issue a proposal on elder financial abuse. As part of the proposal, broker-dealers could freeze accounts of the senior investors if there’s suspicion of fraud.

The North American Securities Administrators Association also proposed model state legislation in September that would mandate disclosure of potential fraud to state regulators and adult protective services, and would allow for delay of fund disbursement for potential victims.